Samizdata quote of the day

“If the Victorians turned up off our shores and threatened me with a gold standard, 7% taxes, property rights, free trade, the right to bear arms, the restitution of double jeopardy, free association, and the right to remain silent, while at the same time guaranteeing the repeal of civil forfeiture and detention without trial, etc., etc., etc., I would welcome them with open arms.”

– Samizdata commenter, John W responding to a point about the supposed evils wrought by the UK on other parts of the world.

I think all taxes are wrong- if we have governments, let them earn their keep through road licenses, or insurance offers, etc.
However, as a practical matter, lowering taxes seems like a prudent move. Make 7% the first goal, then 6%, then 5%, etc.

My (admittedly modest) first step would be a government that lived within it means. In the UK no government* has ever managed to collect more than 40% of GDP as tax, therefore that should be the absolute maximum level of government expenditure. Once that is achieved we can and should start looking for proper reductions in tax and expenditure.

I know the purists here will say I am being soft, but this is about politics as “the art of the possible”

*I believe Brown achieved more than 40% one year, but that was by changing the rules and collecting 18 month’s Corporation Tax in 12 months; not what one might call a sustainable strategy.

I am sure there is an equivalent for the US, but I’m afraid I am not sufficiently aware of the overall US tax situation to know what it might be.

MarkE, I’m not unsympathetic to your ideas but unfortunately I’m more and more of the opinion that it’s not within the realms of the “art of the possible” anymore. Not that we shouldn’t stop trying, of course.

MarkE, from 1950 to 2009 (the first and last years for which I have data) the US has never collected revenues totaling more than 20.4% of GDP. That peak was in 2000. The lowest was 14.8% (in 1950), and the mean over that period is 17.7%. FYI.

Gandhi was a nitwit in a nappy, and a nasty little nitwit at that. He probably did more to retard the cause of Indian Independence than accelerate it.

He also had some odd friends. He used to send letters to Hitler addressed “My Friend…” and then proceeded to give him the benefit of his wisdom and advice. He would also have sided with the Japanese in a shot, had they made a really concerted attempt to invade India.

You surely haven’t bought into all the love and peace bullshit about Gandhi have you MJ? Dig a little deeper.

And what the conflation of him and American foreign policy, is all about is anyone’s guess.

No trade law is preferable to the best trade law, I suspect, but everyone and their grandmother knew that free trade(Link) was what Victorian foreign policy entailed:

“Despite the conclusions of classical theory, few countries have ever actually adopted a policy of free trade. The major exception was Great Britain, which, from the 1840s until the 1930s, levied no import duties of any kind.” – Encarta Encyclopedia ’97.

“You may be cajoled into imagining that your own special trade or your own industry will be encouraged by a protective tariff, but it stands to reason that such legislation must in the long run keep away wealth from the country, diminish the value of our imports, and lower the general conditions of life in this island.
What do you think of that, Watson?” cried Holmes in high glee, rubbing his hands together with satisfaction. “Don’t you think that is an admirable sentiment?” – The Hound of The Baskervilles.

“The doctrine and practice of free trade is in harmony with the essential principle and the benevolent design of the Gospel.” – John Pye-Smith (1774–1851) founder of the Voluntaryist Dissenters.

“The essence of capitalism’s foreign policy is free trade i.e., the abolition of trade barriers, of protective tariffs, of special privileges the opening of the world’s trade routes to free international exchange and competition among the private citizens of an countries dealing directly with one another. During the nineteenth century, it was free trade that liberated the world, undercutting and wrecking the remnants of feudalism and the statist tyranny of absolute monarchies…the world accepted the British empire because it opened world channels of energy for commerce in general.” – Ayn Rand, Capitalism the Unknown Ideal.

TIA: What then is the solution to the violence that’s breaking out around the world?
LP: The solution is for the U.S. to become a pro-capitalist country. That mere fact would be felt around the earth, as England’s freedom was felt in the days of the British Empire. There was (relative) peace throughout the nineteenth century among all the world’s backward tribes for a simple reason: gunboat diplomacy. The English said, in effect, “Behave or we take over.” That was completely moral it was the opposite of today’s “tribal self-determination”and it was practical, too. It kept the thugs of the world in line. After Britain collapsed from socialism, the twentieth century totalitarian regimes played a demonic variant of the role: their monstrous evil terrified the tribal gangs into silence. Now there is neither a world capitalist power nor a world collectivist power: so the perennial tribalism of the ages is asserting itself again.” – Leonard Peikoff, The Intellactual Activist, vol 7 no 4, July, 1993.

Thanks for the information, never a bad day when you learn something. BUT, was that the total average tax take across the Union or just Federal taxes?

RAB

I’ve long felt we need a special category when discussing the mass murderers of the twentieth century; Mao, Stalin and Hitler all have well deserved places in the premiership, and there is no shortage of candidates in the league, but what about mass manslaughterers like Gandhi? I’m prepared to believe that, unlike those named, he didn’t actually intend the deaths of millions, but his naive bourgeois idealisation of picturesque poverty must have caused enough deaths to earn him a suitably dishonourable mention.

Laird you write the truth – but the American government (Federal, State and local) SPENDS more than 40% of GDP.

So either there will be a massive roll back of the state – or taxes will vastly increase (no prices for guessing what Comade Barack wants).

British taxes (at least in times for which we have records) reached their low point for national taxes (as a percentage of the economy) in 1874 (if you count local taxes also – for some places the low point was 1870).

But even for 1913 total taxes (AND GOVERNMENT SPENDIGN) were not much over 10% of the economy.

As for the United States – as late as 1912 total taxes (Federal, State and local) were not far off 7% of the economy.

My understanding is that the figure I quoted was the total for all taxes (national and local). Even if this is not the case however, the UK is far more centralised so local taxes are a comparatively small proportion of the total tax take (local taxes fund only about 25% of local authority activity; the rest is funded by central government grants).

OK, MarkE, got it. From 1950 through 2010, total US governmental revenues (federal, state and local) as a percentage of GDP ranged from a minimum of 22.7% (in 1950) to a maximum of 36.9% (in 2000), with a mean of of 30.8%. Over just the last 20 years the average (mean) has been 33.4%. Helpful?

Alasdair, this(Link) is the best site I’ve found for governmental revenue data. You need to click on “Download Multi”, then select select a year range and choose “Total Direct Rev” for each of Fed, State and Local (it’s a separate line for each). This gives the raw data; I downloaded it all into an Excel spreadsheet and calculated the percentages, averages, etc., myself.

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